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Can You Be Too Lean?

The implementation of lean, if done carefully and contentiously, benefits not only the bottom line but also helps define an organization’s culture: what people say as much as what they do and how they interact.

The dialogue within a company fundamentally changes: continuous improvements (kaizen), value stream mapping and process capability analysis are enhanced. Staff can move from being proactive rather reactive to external and internal changes.

Lean concepts play out operationally in terms of overall equipment efficiency (OEE), process capability analysis, the five whys, the fishbone diagram, etc. These in turn are core competencies that provide value to customers: just in time delivery, optimal quality and service as well as competitive prices.

The rubrics to measure lean are all tangible, well-defined and executable under management leadership, coupled with staff buy-in. That is where the dilemma starts: tangibles. If a concept, initiative, effort is not tangible, quantifiable, it does not easily fit the lean construct.

Unfortunately, there is tension between lean and innovation/creativity. In a perfect world these would align, but as we know the world of manufacturing is not perfect.

Some companies can and do successfully ameliorate the tension between lean and innovation. However, at others, lean distracts from other potentially profitable and stabilizing business opportunities.[PL1] As might be expected, intense concentration on implementing and utilizing lean concepts can lead to groupthink. This may limit staff from looking beyond their immediate areas of responsibility and trying to innovate.

Case in point, I was teaching operations management at a custom manufacturer where our discussion finally let to innovation and creativity. Yes, they had a functioning R&D group that was working on improving operational efficiencies. Great, but I asked if they had developed any of their own products. “No,” was their answer.

I was surprised, because they had an excellent and dedicated staff and impressive expertise in design, materials science, operations, characterization and complex secondary processes. I could not think of any other custom manufacturers that I knew that did not have their product lines. Finally, I asked why. “We do not have the staff or resources to develop our product lines,” they said.

Once again, I was surprised, and explained how so many companies had successfully developed their own product lines. These homegrown products enable these companies to be less vulnerable to market fluctuation with their core customers.

An additional benefit of making innovation a priority is it gives talented teams the chance to unleash creative capabilities that lie dormant. It also provides an opportunity to explore technologies and innovation from other industries.

Innovation and creativity are not easily accounted for or tangible--the development cost is certainly tangible, of course, but is there a guaranteed return? This is problematic given the poor record of successful product launches. Therefore, managers may be reluctance to move forward.

Regardless, the lean world should not blind management to the latent potential of their talented staff who possess many skills sets to help an organization achieve sustainable competitive advantage.

Innovative ideas can come from anywhere if they are given an opportunity to flourish. But to make them a reality, the first step is to conduct an environmental scan to determine what is needed for resources, as well as assess existing talents’ competitive advantage and cultural norms that can either support or diminish such an effort.

It will take time as well as money, with the possibility of low returns initially. Here is where leadership and vision come into play to ensure stability as these efforts mature.

Regardless, even with these preliminary steps, lean can play a critical role. Identifying new or niche markets using quality function deployment is a good first step. On the operational side, modularity, near-net-shape components and look-ahead tooling development can streamline getting products into the market faster and more efficiently.

These efforts can bear fruit if given a chance and a culture that embraces innovation and creativity as an essential core competency.

Bob Simoneau is an associate professor of management at Keene State College in New Hampshire.